The AUDUSD pair is declining on Wednesday trading, developing a corrective impulse formed at the end of last week. The Australian dollar is quoted at 0.7120 against its US counterpart.
The decline in the AUDUSD pair occurs against the backdrop of the local strengthening of the US dollar. We will remind that earlier the US President extended the payment of the increased unemployment benefits as a temporary measure of support, since the Democrats and Republicans have so far failed to reach consensus in negotiations on a new economic aid package. Senate Republican leader Mitch McConnell told Fox News that "White House negotiators did not speak Tuesday with Democratic leaders on the new fiscal stimulus bill." Despite this, investors continue to hope that Republicans and Democrats will come to a compromise and agree on new economic incentives, given that the number of unemployed in the US remains critical, exceeding 30 million.
The Australian dollar is under pressure on Wednesday from weak macroeconomic statistics from Australia. Thus, the consumer confidence index from Westpac in August fell sharply by 9.5% after declining by 6.1% last month. The wage index in Q2 2020 slowed down from + 0.5% QoQ to + 0.2% QoQ, which turned out to be worse than market expectations at + 0.3% QoQ. It is worth noting that Australian households are very concerned about their own employment prospects and the general economic situation in the country. Additional stimulus is likely to be needed to support Australia's sentiment and economy. Earlier, the Reserve Bank of Australia has already increased the pace of daily bond purchases carried out under the national quantitative easing program, which may signals a higher propensity of the regulator to further stimulate monetary policy. With that said, there is a high probability that the AUDUSD sell-off will continue.
AUDUSD SellLimit 0.7150 TP 0.6990 SL 0.72
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